After a period of sustained upward momentum characterized by higher highs and higher lows, the price has reached a critical resistance area where the 100 and 200 day moving averages intersect.
This is a crucial juncture where the price can either undergo a pullback and enter a downtrend or break out of the area and target the $30,000 mark.
Analyzing the daily chart, Bitcoin went through a consolidation phase around the $25,000 level before gaining momentum and entering an uptrend. This upward move pushed the price towards a major resistance area at $28,000, where the 100-day and 200-day moving averages meet.
Given the importance of this resistance area, there is a high probability of rejection, leading to a pullback and possibly starting a sharp downtrend. However, there is a small chance that buyers can hold the price and push it above the moving averages, bringing back bullish sentiment in the market.
Regardless of the outcome, closely monitoring price action in the coming days is crucial, as increased volatility can be expected in the medium term.
Shifting focus to the 4-hour time frame, Bitcoin found strong support at $25,000 after a significant decline. The subsequent uptrend saw the price consistently exceed previous highs, indicating growing interest among market participants.
However, the cryptocurrency is trading within an ascending channel and was rejected from the upper trend line, which is in line with the 0.618 Fibonacci retracement level for the third time. This pattern indicates that sellers are in control and indicates the possibility of another downward movement in the price of Bitcoin.
Despite these bearish signs, if the price can unexpectedly break through this critical resistance zone and show signs of strength, it could pave the way for a surprise rally towards the $30,000 mark. The market’s response to these key levels will determine Bitcoin’s short-term trajectory.
Number of transactions (average)
Following the recent rise in the price of Bitcoin, there has been a significant increase in network activity. The number of on-chain transactions is commonly used to measure this activity. Historically, there has been a positive correlation between the price of Bitcoin and this metric, suggesting that increases in activity often lead to higher prices.
The chart shows a 7-day moving average of the average number of transactions. This metric has been increasing since the Bitcoin price started to rise to $30,000. However, there has been a recent sharp decline in the number of transactions. This is not a positive sign and may have a negative impact on the market soon. If the network activity does not pick up again, the price may see a decline soon.
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Cryptocurrency charts By TradingView.